Future uncertain for Al-Wahda combined-cycle plant

07 April 2006

Three companies have submitted bids for the estimated $500 million turnkey contract to build and operate the kingdom's second combined-cycle power plant at Al-Wahda near Fez. However, the fate of the project remains uncertain due to organisational changes at the client, Office National de l'Electricite (ONE), and issues over the gas feedstock from Algeria.

France's Alstom, Germany's Siemens and a consortium of the US' General Electric and Tecnidas Reunidas of Spain submitted bids in mid-March for the 800-MW plant. The contract involves the engineering, procurement and construction (EPC) of a 400-MW steam turbine and a 400-MW gas turbine, which will take 27 months. In addition, it includes a 10-year operation and maintenance (O&M) component, renewable for two further five-year periods.

Talks are under way on the provision of gas feedstock via the Gazoduc Maghreb Europe (GME) that connects Hassi R'Mel in Algeria with Spain via El-Aricha in Morocco. However, the negotiations have been complicated by the strained political relationship between the two countries. Sources say that the problems are surmountable, but that ONE's recent appointment of a new chief executive officer (CEO) may signal a change of strategy (see page 29).

'The project is now on ice due to the gas supply problem from Algeria,' says one source close to the project. 'And the change of CEO means that priorities will be rearranged and a new strategy put in place. So it is difficult to say whether the project will go ahead.'

It is understood that ONE may seek to address the issue of diversifying Morocco's energy supply away from its reliance on Algerian gas, with options including the development of further coal-fired plants and the construction of an LNG receiving terminal. The expansion of the scope of the planned Ain Beni Mathar project to 400 MW from the currently proposed 250 MW is also under consideration, and ONE's board of directors has given approval for the rehabilitation of two units and the re-powering of the Mohammedia power plant, which would increase capacity by about 500 MW.

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